Taipei: Taiwan Semiconductor Manufacturing Co. (TSMC) announced on Thursday that its net profit for the second quarter reached an unprecedented quarterly high, with the gross margin exceeding the company's predictions amid the ongoing AI boom.
According to Focus Taiwan, the world's leading contract chipmaker reported a net profit of NT$706.56 billion (US$21.96 billion) for the April-June period. This marks a 77.4 percent increase from the same period last year and a 23.4 percent rise from the previous quarter. Earnings per share for the second quarter were NT$27.25, compared to NT$15.36 last year and NT$22.08 in the prior quarter.
The surge in global demand for high-performance computing devices, Internet of Things applications, and automotive and consumer electronics contributed to TSMC's US$40.20 billion in consolidated sales for the second quarter. This figure was at the upper end of the company's previous estimate of US$39.0 billion to US$40.2 billion, made in mid-April. In local currency terms, TSMC's consolidated sales reached NT$1.27 trillion, marking the highest ever quarterly level, with a 36.0 percent year-on-year increase and a 12.0 percent rise from the previous quarter.
Efficiency improvements and increased production capacity utilization enabled TSMC to achieve a gross margin of 67.7 percent in the second quarter, surpassing the earlier estimate range of 65.6-67.5 percent. This margin reflected a 9.1 percentage point increase from last year and a 1.5 percentage point rise from the previous quarter.
TSMC's advanced chip technologies showed significant contributions, with chips using the 2-nanometer process accounting for 3 percent of total sales. Meanwhile, chips utilizing the 3nm, 5nm, and 7nm processes constituted 30 percent, 33 percent, and 11 percent of the total, respectively. Collectively, these advanced technologies represented 77 percent of total sales in the second quarter, up from 74 percent in the first quarter. The 2nm process is TSMC's latest technology to enter mass production.
For the first half of the year, TSMC reported NT$1.28 trillion in net profit, a 68.3 percent increase from the previous year, while earnings per share rose to NT$49.32 from NT$29.30. The company's gross margin for the six-month period increased by 8.3 percentage points from last year to reach 67 percent.